Wednesday, May 21, 2014

How Did We Arrive At The Point Where Our Government Picks Winners And Losers In Business?

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With the passage of each day living in the United States of America, I am growing increasingly disillusioned by an acceptance of the belief that government has a fundamental right to tax me and every other citizen and then redistribute those tax dollars to private businesses that it deems worthy of funding. I'm not just talking about the special tax breaks that litter our tax laws at the federal, state and local level that provide preferences for people and businesses to act in a way favored by the government. I'm talking about direct grants that are being provided at an alarmingly increasing rate to an elite group of private developers and corporate interests. In Indianapolis, these grants are doled out millions of dollars and sometimes tens of millions of dollars or more at a time.

At the latest meeting of the Indianapolis Metropolitan and Economic Development Committee on Monday night, a packed room of money-grubbing political insiders packed the hearing room to ensure passage of proposals that provided multi-million dollar handouts to politically-connected developers. There were three potential Democratic mayoral candidates in the room, including Council President Maggie Lewis, a member of the committee, lobbyist and Washington Township Trustee Frank Short and State Rep. Ed DeLaney, all on hand to support the multi-million dollar giveaways to big campaign contributors backed by our incumbent Republican mayor, Greg Ballard.

The biggest prize of the night was the nearly $8 million in borrowed funds to be repaid with TIF property tax dollars awarded for Browning Investment's mixed use development project in Broad Ripple that includes a Whole Foods grocery store, apartments and a parking garage. As a bone, $1.5 million is being borrowed to invest in the blighted Tarkington Park community. For downtown, there was nearly $5 million to be split between The Whitsett Group's Pulliam Center mixed use project at the site of the Indianapolis Star building and surrounding parcels and the second phase of the Millikan affordable apartment project on Mass Avenue. The public subsidy for Whitsett is justified because he's going to provide 75 pay-to-use parking spaces in a parking garage at the site and a small off-street dog park within the project that will barely be accessible to members of the public not residing in the apartment complex.

As near as I can tell from watching the meeting, only one member of the committee, Councilor Zach Adamson, had any reservations about funding for either of the projects. He offered an amendment to scale back the size of the money being borrowed to fund the two projects in the Mid North TIF district which died for lack of a second. Both proposals flew out of committee with no dissenting votes, except for Adamson's vote against the Broad Ripple funding, exactly as the proponents desired them. Only two members of the public testified in opposition to the proposal, who were told by Councilor Vop Osili, who was chairing the meeting in Councilor Leroy Robinson's absence, that they would only have two minutes to speak, unlike the proponents of the projects who consumed as much time as they desired per standard operating procedure at council meetings.

The first gentleman who spoke, whose name I could not make out, makes some serious allegations of conflicts of interest that drove the project from the outset and which he alleged cost his own business nearly $5 million. If anyone knows who this gentleman is, I would like to speak to him and share more information about the background information he briefly summarized about non-disclosure agreements being signed by the various players during the TIF district study and planning process and how certain corporate entities acquired property supposedly to help out the community but under circumstances that forced the cramming down of property values which were then transferred to the real parties in interest in a fashion that transferred millions of dollars in value from his business to the conflicted parties. [UPDATE: The gentleman has been identified as Leif Hinterberger of Carreau Design Corp., who unsuccessfully pushed city and community leaders for support of his Upland project at 49th & College for several years after he says he poured $5 million of his own money into the planned mixed use project. Read more about it here. It certainly should have been a project with a higher priority given the blight that exists there as opposed to one closed gas station that gave rise to the $8 million investment in Browning's project in Broad Ripple in what is otherwise a booming area.]

What he described happening might involve more than just unethical conduct on the part of certain players. Frank Short can be seen laughing at this gentleman's tale of losing $5 million, which says a lot about his character. I would like to get to the bottom of it because it's clear that nobody at the Indianapolis Star cares about public corruption. Their columnist and reporters were part of the amen crowd which predominated the hearing. Political columnist Matt Tully lamented in a column this week that "It shouldn't be this hard." Say what? Apparently he was upset that it took a few months rather than a few weeks to obtain approval for millions of dollars in public funding for a Whole Foods grocery store in Broad Ripple that he thinks the village will die on the vine without. Of course, the Star never disclosed its conflict of interest in pushing the approval of the expanded downtown TIF district, which we now know was used to leverage the sale of an entire city block to Whitsett.

Citizen activist Larry Vaughn also spoke about the inherent unfairness in the council picking winners and losers. A lot of people like to call him "Crazy Larry," but honestly speaking, Larry made more sense than the gibberish spoken by most of the members of the council who have no problem handing out money to their campaign contributors like its candy as if that's their civic duty, but when it comes to funding our basic city services, they tell us that we will have to accept paying higher taxes because there's not enough money in the budget to hire police officers, fix our streets and sidewalks, maintain our parks or perform any of the other basic services that are supposed to the be the primary purpose for the existence of the municipal corporation. I agree with Larry. Some of these council members clearly have some side bets going on that are a lot more lucrative than the $15,000 they earn annually from serving on the council to make them so anxious to pass out hundreds of millions of dollars to private businesses at a time the City is supposedly so hard-pressed financially to pay for basic services.

The bottom line is that our country has become an oligarch of the worst form just as bad as Nazi Germany was at its height of power. At the close of the 1787 Constitutional Convention, Benjamin Franklin was asked by an inquiring citizen outside Independence Hall what the delegates had agreed upon. Franklin replied, "A republic . . . if you can keep it." I think Franklin would agree if he were alive today that we failed to keep our republic. The shocking aspect of this is the total obliviousness that most people in this country seem to have to this horrifying transformation. Why do I feel all alone even caring that it has happened? I'm sorry, but I just don't recognize the country in which I live any more. Can I ever go home again to the America I was taught to love and respect?


Pete Boggs said...

You're not alone.

Anonymous said...

Zach Adamson voted against the Broad Ripple TIF loan. I believe you stated it was an unanimous vote.

Anonymous said...

The "gentleman" you seek is in fact a real estate developer who is still miffed because 100% public financing wasn't offered for a project he'd been pushing for a decade on property he doesn't own or control.

Anonymous said...

ps - Google "The Uptown"

Flogger said...

Gary, you are not alone. I am not kidding perhaps we can start a support group.

Boss Tweed or Daley the Elder would recognize the system workings of the Government we have. It is Corporatism or Fascism.

Both Political Parties, call them Republicrats, rally to the same Flag.

The last Mayoral Election and the Republicrat Candidates avoided touching the Third Rail of Corporatism, Pay to Play and Corporate Welfare.

The Mega-Media Press here is nothing less than lap dogs for the system. The tradition of the Fourth State has long been dead in Indianapolis. The Press here resembles Pravda of the Old Soviet Union rather than the fine tradition of Muckraking.

I was drafted in 1969 and sent to Vietnam. I can safely say if they still had a Draft and I was called up today I would go to Canada. I would not defend this system as it now is.

Anonymous said...

Many of your readers see the banal stupidity of our large, centralized federal government apparatus. Somehow many still believe that most local governments operate in their best interests and just want to build the community.

That's a lie. Speaking as one with lots of experience in local government (not Indy or close to), most folks in local government are just as stupid, evil, conniving, selfish as your Indianapolis government.

We're all screwed until honest people stand up and start fighting.

Anonymous said...

By the time a TIF District was formed, Leif no longer owned an interest in any of the property. His original plan included a TIF District that ran from the Fairgrounds to the Art Museum, and 10th Street to 71st to fund the project. A later version, at least the last while he held some of the property, required a combination of Federal Tax Credits and other public contributions for funding. The current owner of the property is not, currently, seeking TIF funds. While it would be nice to have something buit at this location, given your preference for absolutely no government participation, why on earth would the previous project be "more desirable"?

Gary R. Welsh said...

I don't think the government should be providing public funding for private real estate development projects, but the purpose of TIF districts was originally intended to redevelop blighted areas, not booming areas where development is already in full bloom as occurs over and over again in Indianapolis. The Upland project at least represented an attempt to redevelop a blighted neighborhood.

Anonymous said...

The blighted neighborhood at 49th & College is about 25% bigger than the blighted Shell station.

Indy Rob said...

Gary, the corruption starts at a local level and goes all the way up. Last night, Andre Carson spoke at a commencement ceremony, his introduction ran five minutes and basically covered his political resume including his time on the Indianapolis city council.

This 3 term congressman (and every other one like him) qualifies for a us government pension after being in office for 5 years starting at about $14,000 per year (it goes up if he stays in congress longer) and that pension is on top of social security which is on top of any other pension he will receive. Assuming that he lives to be 87, this congressman will collect that $14,000 for 25 years, a benefit that I can only match by saving $375,000 in a 401k.

The business winners and losers are the ones who pick our government officials, these officials are the best that they can buy. Putting and keeping corrupt people in power is to these business's benefits,

It is a sad system, what is the best way of breaking it?